Justia Trusts & Estates Opinion Summaries

In this case, the Supreme Court of Arkansas was hearing an appeal regarding the distribution of the estate of John Haverstick Sr., specifically an annuity that he had purchased. The appellants were John Sr.'s sons, John Jr. and Jerry, and the appellee was John Sr.'s surviving widow, Frances. The sons argued that the lower court erred in finding that John Sr.’s will had changed the beneficiaries of the annuity, citing three reasons: (1) the will did not claim to change the beneficiaries; (2) even if the will claimed to change the beneficiaries, it was ineffective because it did not comply with the contractual procedure for making changes; and (3) under Act 925 of 2021, attempts to change annuity beneficiaries by will are ineffective.The Supreme Court of Arkansas ultimately decided to affirm the lower court's ruling. The court held that John Sr.’s will did change the annuity's beneficiaries because it sufficiently identified the annuity policy and expressed an intent to change how the proceeds would be distributed upon his death. The court rejected the argument that the will was ineffective because it did not comply with the contractual procedure for making changes, noting that the policy of allowing a testator to modify a beneficiary designation to life insurance policies also applies to the will in this case. Finally, the court found that Act 925 of 2021 does not apply retroactively, and thus it did not render the changes in the will ineffective. View "Haverstick v. Haverstick" on Justia Law

In September 2021, Aaron Welch died intestate, leaving behind a widow, Kristin Welch, and two minor children from his previous marriage. Kristin Welch, appointed as the administratrix of Aaron Welch's estate, filed an application for reservation of homestead & dower with the Pope County Circuit Court, claiming a homestead interest in the mortgaged home she had lived in with her late husband. Katelyn Gipson, the natural guardian of the minor children, argued that Kristin Welch did not have such an interest based on Arkansas Code Ann. § 28-39-201. This statute requires a surviving spouse to have been continuously married to the deceased for more than a year to have a homestead interest. Kristin Welch challenged the constitutionality of this statute, but the circuit court found it constitutional and ruled that she did not have a homestead interest in the property.On appeal, the Supreme Court of Arkansas affirmed the lower court's decision. The Supreme Court noted that the Arkansas Constitution's provision on homestead rights was gender-based and had been previously declared unconstitutional for violating the Fourteenth Amendment's Equal Protection Clause. Consequently, the statutory provision, Ark. Code Ann. § 28-39-201(d), which is gender-neutral and requires the continuous marriage condition, stands as the controlling law. The court found no error in the circuit court's application of this statute and concluded that Kristin Welch, having been married to the decedent for less than a year, did not have a statutory homestead interest in the property. View "WELCH ex rel. ESTATE OF AARON WELCH v. GIPSON" on Justia Law

The Supreme Court reversed the order of the circuit court granting Defendant's motion to dismiss this tort action brought against an estate, holding that the statute of nonclaim, as opposed to the general three-year statute of limitations, governed Plaintiff's claims and that she timely filed her amended complaint pursuant to the applicable limitation period.Plaintiff filed an amended complaint against the special administrator overseeing the estate of the person with whom she was in an automobile accident. Defendant filed a motion to dismiss the complaint pursuant to Ark. R. Civ. P. 12(b)(6) on the grounds that it was barred by the applicable statute of limitations. The circuit court granted the motion. The Supreme Court reversed, holding that the circuit court erred in applying the general three-year statute of limitations in dismissing Plaintiff's amended complaint as untimely rather than applying the applicable limitation period set forth in the statute of nonclaim. View "Marcum v. Hodge" on Justia Law

The Supreme Court affirmed the judgment of the circuit court entering a declaratory judgment finding that the death benefit of a term life insurance policy owned by Dr. James Rocconi was payable to his children and not to Teresa James, Rocconi's ex-wife, holding that James was not entitled to relief on her allegations of error.After Rocconi died, his children and the executor of his estate brought a declaratory judgment action asking the circuit court to find that they were the beneficiaries of Rocconi's life insurance policy. James counterclaimed, seeking a declaratory judgment that the policy provided for payment of the death benefit to her. The circuit court entered judgment for Rocconi's children and executor. The Supreme Court affirmed, holding that James was not entitled to relief on her allegations of error. View "James v. Mounts" on Justia Law

The Supreme Court reversed the order of the circuit court disqualifying Risie Howard as the attorney representing the estate of Mrs. George Howard in a case arising from Mrs. Howard's medical treatment, holding that the circuit court's ruling represented a manifest abuse of discretion.On appeal, Howard argued that the circuit court erroneously interpreted Rule 3.7 of the Arkansas Rules of Professional Conduct and misapplied the test promulgated in Weigel v. Farmers Insurance Co., 158 S.W.3d 147 (Ark. 2004), in granting Defendants' motion to disqualify her. The Supreme Court reversed, holding that the circuit court did not faithfully apply Rule 3.7 and the precedent established by Weigel and its progeny in disqualifying Howard. View "Howard v. Baptist Health" on Justia Law

The Supreme Court affirmed the judgment of the circuit court dismissing Appellants' motion to set aside an order probating their father's will and appointing their stepmother, Appellee, as personal representative of their father's estate, holding that sufficient evidence supported the circuit court's decision.In Appellants' motion, Appellants also contested the validity of their father's will and alleged that Appellee unduly influenced their father to dilute Appellants' share of an annuity, payable upon his death. The circuit court determined that the will was valid and that there was no undue influence. The Supreme Court affirmed, holding that the evidence supported the circuit court's conclusions. View "Haverstick v. Haverstick" on Justia Law

In this case involving the administration of several family trusts the Supreme Court reversed the denial of a jury trial on Appellant's legal claims and affirmed in all other respects the order of the circuit court denying Appellant's petition to direct trustee to issue trusts reports and accountings and for removal of trustees and for other relief, holding that the circuit court erred by denying Appellant a jury trial on his legal claims but otherwise did not err.Specifically, the Supreme Court held (1) the chief justice had jurisdiction to appoint a special judge in the case; (2) the circuit court erred by denying Appellant a jury trial on his legal claims, but Appellant was not entitled to a trial by jury on his equitable claims; (3) the circuit court did not err by relying on extrinsic evidence to determine settlor intent; (4) the circuit court did not err by denying Appellant's claim for failure to provide an accounting or in declining to appoint a special master; and (4) the circuit court did not err in not invalidating trust amendments. View "Dawson v. Stoner-Sellers" on Justia Law

The Supreme Court reversed the judgment of the circuit court granting Walt & Lee Keenihan Foundation, Inc.'s (Foundation) motion for summary judgment and dismissing Heritage Properties Limited Partnership's (Heritage) complaint seeking to set aside an alleged fraudulent conveyance to the Foundation pursuant to a transfer on death (TOD) beneficiary designation on an account owned by Leta Keenihan, holding that the circuit court erred in deciding this case by summary judgment.Specifically, the Court held (1) the circuit court clearly had jurisdiction in the present case; (2) Heritage, as a creditor, had standing to pursue its claim under the Fraudulent Transfer Act against the Foundation as the transferee; and (3) Heritage was not required to present evidence of Keenihan's intent at the time of the TOD designation, but the evidence raised a factual issue precluding summary judgment as to whether Keenihan reasonably should have believed that she would incur debts beyond her ability to pay. View "Heritage Properties Limited Partnership v. Walt & Lee Keenihan Foundation, Inc." on Justia Law

The Supreme Court affirmed the order of the circuit court finding attorney Jonathan Streit in contempt of court and assessing a $100 fine, holding that substantial evidence supported the court's decision that Streit's actions displayed a lack of regard for the court's integrity and demonstrated disrespect.Streit appeared before the circuit court on a petition for permanent guardianship. At the hearing, the circuit court noted several deficiencies in the case file. The circuit court was unwilling to let the matter to proceed without compliance with the statutory requirements, and Streit argued that the circuit court took issue with him because he successfully reversed the circuit court in a separate case. The circuit court then found Streit in contempt of court and assessed a fine. The Supreme Court affirmed, holding that substantial evidence supported the court's decision to hold Streit in contempt. View "Streit v. State" on Justia Law

Appellant James Corn appealed a circuit court order denying his petition to establish a special-needs trust pursuant to 42 U.S.C. 1396p(d)(4)(A). Corn was disabled because of a head injury from which he suffered short-term memory loss. Because of the severity of his injury, he received Social Security Disability (SSD) and Supplemental Security Income (SSI). Corn’s eligibility made him automatically eligible for Medicaid. However, SSI had an asset test which stated that Corn would become ineligible if he were to have assets of more than $2,000. Because of this, Corn’s partner, Ms. Yelvington, now deceased, established a special-needs trust for him. Yelvington also designated Corn as a beneficiary on life insurance policies and her bank accounts. There was approximately $260,000 that was not transferred into the special-needs trust created by Yelvington, and because Corn was designated as the beneficiary on these assets they would pass directly to Corn upon Yelvington’s death. Because these assets would be passing directly to Corn rather than through a special-needs trust, Corn would be ineligible to receive SSI benefits. In order to prevent this, Corn attempted to create a "D4A" trust. At the time of the circuit court hearing, Yelvington had passed away and her estate was in probate. Corn had not yet received any funds from her estate or from her beneficiary designations. In its order denying Corn’s motion for reconsideration, the circuit court found that the establishment of the trust would be against Arkansas public policy and that there was insufficient evidence presented to support that a special-needs trust should be established. The Supreme Court found that through his testimony at the hearing and by attaching letters from the Social Security Administration to his motion for reconsideration, Corn provided the circuit court with sufficient evidence of his disability. Therefore, the Court held that the circuit court erred in finding that there was insufficient evidence that Corn was disabled. The circuit court’s order was reversed and the case remanded for a determination of whether the proposed D4A trust met the requirements set forth in the statute. View "In re Corn" on Justia Law